Merrill Lynch/RPP Model (BSSE, Wednesday, Week 2)
building-and-sustaining-successful-enterprisesyear-twoThe RPP model for thinking about firms:
Resources = people, technology, equipment, cash = "what we have"
Processes = "what we do"
Priorities = "the formula we use to create profit"
Key question: Is our past success due to the resources or the processes?
Contemporary example: Steve Jobs is leaving Apple. Is Apple doomed? If their success is due to resources --- Steve Jobs' innate ability to make products that blow up --- then they will have to replace a unique resource, which will be hard. If their success is due to processes --- a set of linkages and workflows that generate products that blow up --- then they might not have to replace much.
There are no disruptive technologies, only disruptive business models. Even technologies that would appear to completely "change the game" can often be integrated into a firm's existing processes and priorities --- as sustaining innovations.
Example: Merrill Lynch and the dawn of the Internet. Merrill initially stays out of online brokerage game/robust customer portal game and uses the web to give wealth managers and other employees better data on their clients' positions, demographics, etc. Its customers aren't really lured in by $10 transaction fees; they're not looking to save a few bucks per trade. A sustaining innovation.